Date: Thu Dec 02 2004 10:13
trotsky (@PM stocks) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
however: surprisingly, money flows are actually looking quite good so far today. this suggests one should continue to adopt a wait and see attitude, and not join the slightly panicky dumping orgy.
Date: Thu Dec 02 2004 10:05
trotsky (nabob@BGO) ID#248269:
you can thank the nut-jobs at GATA...
Date: Thu Dec 02 2004 10:04
trotsky (pm stocks) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
this is a joke, right? they seem to be discounting a pretty big correction at this stage. unfortunately per experience, when the correction actually comes, they'll begin to discount an even bigger correction.
Date: Thu Dec 02 2004 10:02
trotsky (lilbett) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
"Rates have at least 2-3% to go up before there is any noticeable effect on Housing, at least on the Left coast, IMO."
how come then that over the last 6 months alone, residential real estate transaction volumes are down about 30% in San Diego ( roughly the same thing applies to other cities and counties in CA ) , while inventories ( homes for sale ) are up about 80%? the period in question has actually seen FALLING rates, not rising ones. a 'temporary soft patch'?
do you think it's impossible for a bubble market to become saturated and peak without an exogenous trigger? please note, in spite of the lowest mortgage rates in two generations, monthly mortgage ( and property tax ) PAYMENTS are up at a record high. meanwhile, affordability is at a record low and rental yields are at a record low, since prices have risen further above trend than at any time in history.
also, foreclosures and delinquencies rise relentlessly month after month - and are at a multi year high.
the probability that the bubble has ended is very high - prices haven't come down much yet, but this is the typical time lag embedded in what is a rather illiquid market. the damage will only become obvious once transactions that have been postponed due to too high asking prices get done ( this is what the inventory/sales ratios tell us unequivocally - when inventories rise sharply while transaction volumes fall, it is because the spread between bid and ask prices is too large ) .
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